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Manas Resources (ASX code: MSR)
Board changes between July 2015 and July 2016:
Resignations: CEO Stephen Ross, Mark Connelly
Replacement: Mark Calderwood (Chairman) & Philip Reese (CEO)
Cash reserve: 323k + 1.35M
Capital Raisings:
3 CRs between July 2015 and July 2016
Capital raised: A$ 4.5m, 821k, 203k (July 2015, Feb 2016 & June 2016)
4.5m: $0.007 per share, 617.8m
Funds to be used for: Pre-development and development expenditure at SGP, including completion of basic engineering works, technical permitting, finalisation of environmental permitting; limited exploration and evaluation expenditure; Manas Group administration, corporate and overhead expenditure and repayment of a short term loan of $200,000
821k: $ 0.0018 per share, 365m
Acquisition of Victoria Gold project
203k: $0.00275 per share, up to 74m shares
To fund due diligence enquiries in relation the Victoria Gold Project
and working capital including for the Shambesai
project.
Shambesai Gold project:
◆ Revised pre-production capital cost estimated at US$27M, down from US$41M reported in the February 2015 Bankable Feasibility Study Update (BFS Update) due to design changes, timing of capital expenditure and the replacement of some capital expenditure with an operating cost solution.
◆ Estimated total pre-production and sustaining capital costs of Life of Mine (LOM) of US$38M down from US$48M reported in the BFS Update.
◆ The revised NPV after taking into account the above capital and operating cost adjustments is estimated at US$83M (at US$1,100 per ounce gold price and an 8% discount rate), up from the US$68M reported in the BFS for the same gold price. This NPV estimation retains the pit design (BFS Pit) which is based on a US$1,500 gold price and which was used in both the original BFS and the BFS Update.
◆ The design for a smaller main pit (Small Pit) used a US$1,100 gold price pit shell instead of the US$1,500 gold price pit shell used in the BFS and BFS Update. It reduced material movement by 50% and contained gold by only 13% while increasing gold grade to 3.9g/t Au up from 3.7 g/t Au.
◆ Average cash cost per ounce of gold for the Small Pit option reduces to US$314 per ounce (excluding royalties and tax) from US$416 per ounce in the BFS update.
Total Au resource: 1.184 Moz
Total Au reserve: 279koz
At a gold price of US$1,100 per ounce gold price, operating cash costs of US$345 per ounce of gold are forecast (C1 costs excluding revenue based royalties and taxes). Average total cost of production (C3 costs) after capital, development and operating costs, taxes and royalties excluding further exploration drilling, corporate overheads and financing costs is estimated to be US$584 per ounce of gold produced.
The updated economic parameters for the BFS Open Pit show undiscounted net cash flows of US$121M after life-of-mine capital expenditure of US$39.1M, operating costs, taxes and royalties. The capital cost to first production and gold pour are estimated to be US$27.9M with payback of this capital within the first 13 months of operation.
The NPV of Shambesai has been estimated at US$83M at an 8% discount rate over the 4 ½ year mine life. The project cash flows deliver a recalculated IRR of 100%. All of the BFS cash flow estimates are calculated at a US$1,100 gold price and are made assuming the treatment of all oxide and high grade sulphide ore within the design pit shell, and after all revenue-based taxes and royalties have been paid.
Based on today’s gold price: NPV should be U$137M (instead of U$83M)
The recent rise in the gold price and on-going political stability in Kyrgyzstan has seen a significant increase in interest by external parties in evaluating the potential of the Shambesai Gold Project (“Shambesai”). This has resulted in recent completion of four successful in-country due diligence visits. Manas is in on-going discussions with these groups in relation the funding or sale of Shambesai with the view to generating shareholder value in the near term.
Victoria Gold Project acquisition
◆ US$200,000 deposit paid for Victoria Gold Project acquisition
◆ Acquisition comprises a significant holding of over 350km2 with identified areas of gold mineralisation and excellent exploration upside strategically located near several established mining operations in the multi-million ounce Lake Victoria Gold Field of Tanzania
◆ Technical and legal due diligence underway
The VGP licenses are strategically located near several established gold mines in the Lake Victoria Gold Field of Tanzania and cover an area of approximately 350km2. Manas' preliminary due diligence investigations of the extensive drill hole database indicate potential for significant occurrences of shallow gold mineralisation amenable to open pit extraction with good exploration upside.
Victoria Gold project: Neighboring gold projects’ resources ranging from 0.5Moz to 21.3Moz
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